The Economic Impact of the Corona Hysteria

Over the past month, most countries in Europe have instituted far-reaching restrictions, almost bordering on martial law, to try to limit the spread of the most recent type of coronavirus, called SARS-CoV-2, which causes the covid-19 sickness.

In this post, I’d like to take a look at what these restrictions will mean for the future of the European economy.

But let’s first make a few facts straight about SARS-CoV-2.

Many people may not realize that the first human coronaviruses were discovered in the 1960s and that they are quite common in the population. Since the discovery of coronavirus 229E and coronavirus OC43 in the 1960s, five new strains of coronaviruses have emerged. And according to a Glasgow hospital study made from 2005 to 2013, between 7-15% of patients with respiratory diseases had some type of coronavirus in their bodies. Coronaviruses are thus far more common than many people may realize.

Germany is so far the only European country that has conducted widespread testing of the population. According to the latest figures from the WHO situation dashboard, through extensive testing, the German authorities have diagnosed 24,774 people with SARS-CoV-2, and 94 people have died. That would mean a death rate of 0.38 percent.

Two days ago, many news outlets reported that 793 people had died from covid-19 in Italy in one day. When reading such news, there are some facts that you should be aware of:

  • About 650,000 people died in Italy in 2019, before covid-19. That’s about 1,800 per day. Most of these people belonged to the so-called corona risk groups.
  • In Lombardy alone, the region most severely hit by covid-19, 99,542 people died in 2018.
  • Extrapolating the aforementioned Glasgow numbers to Italy, it is entirely possible that up to 100,000 of the Italians that died in 2019, or 270 people per day, had some form of a coronavirus in their bodies at the time of death. But since the corona hysteria did not exist in 2019, the patients were probably not tested for any coronavirus, so we will never know the true number.
  • About 99% of the 793 people that died on Saturday had severe previous diseases, such as high blood pressure, diabetes, and heart diseases.
  • Almost half of them had three or more serious diseases.
  • About 25% of the Italian adult population are smokers, while about 13% are former smokers. I have not seen any statistics about how many covid-19 patients are smokers, but I would consider it very likely that the number of smokers among them is far higher than 25% as covid-19, a respiratory disease, hits smokers harder.
  • As far as I know, none of the 793 patients were tested for other viral infections. It is therefore entirely possible that the 793 people that died also had one or several other viruses in their bodies at the time of death, such as the regular flu.

Based on all these facts, I come to two conclusions:

1) It is entirely unscientific to claim that these 793 people died from covid-19. We simply do not know how big a role covid-19 played in these people’s demise. If an elderly person is a smoker and has problems with high blood pressure, diabetes, heart diseases, and one or more viruses in his or her body, it is unscientific to claim that covid-19 was the cause of their death.

2) The news media give the impression that the number of deaths has grown from zero to 800, but that’s a false narrative. In order to put this into perspective, you have to look at the total number of deaths, which has gone from 1,800 per day to … what? I have not seen any news media at all which gives a comparison for the total number of deaths in Italy. Has it risen, or has it not risen? The fact is that elderly smokers with high blood pressure die every day in Italy, both before covid-19 came and after the virus is gone.

And now we come to the economic impacts of the restrictions that European governments have introduced to curb the spread of covid-19, and the damage that the fear of covid-19 has caused to the economy. It is absolutely clear that the restrictions will have a drastic negative effect on the European economy for many years to come, and perhaps even decades, and my impression is that most governments have taken these measures without considering the economic impacts of the restrictions.

Many people, both in government and among the population, have adopted the position that “it’s only money, it’s more important to save lives than saving money.” That is, in my opinion, an extremely naive way of looking at society. The European governments take drastic measures because they have chosen to listen to only one set of “experts,” the experts in pandemics. But they have not asked the experts in economics for their opinion. The press also has a special guilt in this situation because they have been whipping up an extreme fear of covid-19, causing panic among large parts of the population.

If I had been a prime minister, I would have assembled a group of experts in national economics, psychology, and geopolitics, and I would have asked them to calculate what the effects of any restrictions will have on the economy, the population, and the geopolitical situation before instituting any restrictions. I would have asked them the following questions:

  • How many people will become unemployed because of the suggested restrictions?
  • How many people will face difficulties with paying their rents or mortgages, and will become homeless?
  • How many people will not be able to buy proper food and will become malnourished?
  • How many people will see their pensions go down the drain?
  • How much will the tax revenue be cut when businesses go bankrupt and workers become unemployed?
  • What cuts will we be forced to make in the welfare system when the tax revenue falls?
  • What will the results of the economic crash mean for the population’s mental well-being and potential suicides?
  • Will there be a heightened risk of war due to the economic crash?

My impression is that none of the panicked governments have even bothered to ask these questions before instituting virtual martial law.

It is quite clear to me that in the coming months and years, all over Europe, there is a high risk that people will lose their livelihoods, people will become homeless, people won’t be able to buy proper food, people will commit suicide, malnutrition diseases will increase, the welfare systems will collapse, and some hospitals may have to close their doors. So, no, it is not “only money.” Money is homes. Money is food. Money is pensions. Money is health care.

Perhaps even more importantly, when the economy is crashing, the risk of war is far higher. The risk of World War III is, in my opinion, far higher now than it was just three months ago.

It seems to me that the press and politicians believe that this is the end of the world. This is Armageddon. But it’s not true. This is not the end of the world. 2021 will come, with new viruses and new challenges.

We need to end this virtual martial law, and the press needs to stop with their fearmongering, as soon as possible. If not, there won’t be any money to pay for our housing in 2021, for our food in 2022, for our hospitals in 2023, and for our pensions in 2024.